Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>Foundry segment is on track to decline 15% YoY with no prospects of a meaningful H2 recovery</li>
<li>Inventory levels across smartphone, PC and consumer electronic supply chains remain elevated, plagued by lack-lustre end user demand. </li>
<li>At least some of the key players appear to be lowering prices but this is highly unlikely to stimulate end user demand and may actually make things worse</li>
</ul>


Foundry segment is on track to decline 15% YoY with no prospects of a meaningful H2 recovery
Inventory levels across smartphone, PC and consumer electronic supply chains remain elevated, plagued by lack-lustre end user demand. 
At least some of the key players appear to be lowering prices but this is highly unlikely to stimulate end user demand and may actually make things worse


Q2'23 Foundry Flounders As Inventory Stubbornly Lingers

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.


Hong Kong Connect Flows (July): Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>We expect SMIC to report C1Q23 top-line and non-IFRS net income 2% and 16% vs. consensus, respectively.</li>
<li>We suggest SMIC’s ability to supply sanctioned firms with 14/7nm nodes provides it with significant pricing power. We expect the decline in SMIC’s wafer ASP to slow.</li>
<li>We expect overall 2H demand to improve due to (1) normalizing fabless inventory levels, and (2) stabilized smartphone demand. We maintain BUY rating and raise our TP to HK$ 26.</li>
</ul>


We expect SMIC to report C1Q23 top-line and non-IFRS net income 2% and 16% vs. consensus, respectively.
We suggest SMIC’s ability to supply sanctioned firms with 14/7nm nodes provides it with significant pricing power. We expect the decline in SMIC’s wafer ASP to slow.
We expect overall 2H demand to improve due to (1) normalizing fabless inventory levels, and (2) stabilized smartphone demand. We maintain BUY rating and raise our TP to HK$ 26.


[SMIC (0981 HK, BUY, TP HK$26) Target Price Change]: Pricing Power Courtesy of Export Restrictions

<ul>
<li>Real Estate Industry Update: Beijing intends to give policy support to the purchase of green buildings（+）</li>
<li>Real Estate Industry Update: Ministry of Housing promised to lower housing down payment, and loosen home purchase restrictions（+）</li>
<li>981.HK/1810.HK/AAPL: Huawei to launch new 5G-enabled smartphones ( + / -)</li>
</ul>


Real Estate Industry Update: Beijing intends to give policy support to the purchase of green buildings（+）
Real Estate Industry Update: Ministry of Housing promised to lower housing down payment, and loosen home purchase restrictions（+）
981.HK/1810.HK/AAPL: Huawei to launch new 5G-enabled smartphones ( + / -)


China TMT Update-BEKE/981.HK/1810.HK/AAPL-Ministry of Housing Loosen Home Purchase Restrictions

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 21st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 2.1billion and highlight flows for Tencent, Hsbc.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 21st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 2.1billion and highlight flows for Tencent, Hsbc.


Hong Kong Connect Flows (Jul 21st): Tencent, HSBC

China

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Price Gauge
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Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Q2'23 Foundry Flounders As Inventory Stubbornly Lingers

Foundry heading for 15% YoY decline with no prospect of a meaningful H2 recovery. Some key players may be lowering prices. This is unlikely to...

William Keating

Hong Kong Connect Flows (July): Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx

We analyzed the Hong Kong Connect Scheme for July and highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.

Ke Yan, CFA, FRM

[SMIC (0981 HK, BUY, TP HK$26) Target Price Change]: Pricing Power Courtesy of Export Restrictions

We expect overall 2H demand to improve due to (1) normalizing fabless inventory levels, and (2) stabilized smartphone demand, per peer guidance. We...

Blue Lotus Research Institute

China TMT Update-BEKE/981.HK/1810.HK/AAPL-Ministry of Housing Loosen Home Purchase Restrictions

Beijing intends to give policy support to the purchase of green buildings; Ministry of Housing promised loosen home purchase restrictions; Huawei...

Blue Lotus Research Institute

Hong Kong Connect Flows (Jul 21st): Tencent, HSBC

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent Holdings Limited and, HSBC.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)